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Abstract:

A method and system are described for creating an exchange for futures
products for odds markets based on binary outcomes. The futures product
is based on the value of a particular fixed index or an exchange delivery
settlement price in odds form, as recorded or computed at the end of a
pre-assigned event or time-horizon. A particular use of this product
would be on an exchange for sporting events, where for a given event, an
identical interface to that which would currently be available for odds
markets is made available, but which would be settled differently from
the former, in such a manner as to allow investors to take positions on
the movement of the odds without exposure to the final outcome of the
event.

Claims:

1. A computer device for processing trades on odds-based markets, the
computer device comprising a memory and a display unit coupled to a
processor, the computer device operable to: receive from a server system
exogenous index odds, wherein the exogenous index odds comprise gross
odds for one or more possible outcomes in a given event offered by an
exogenous market, the gross odds having been adjusted so that the sum of
the inverse of the gross odds for all possible outcomes is about 1;
display the exogenous index odds on the display unit; obtain a selection
from a user comprising a forecast of a value for the exogenous index
odds; and communicate the selection to the server system to be processed
at the server system as a new trade.

2. The device of claim 1, further operable to display a grid comprising:
the exogenous index odds, at least one short position selectable by the
user, and at least one long position selectable by the user.

3. The device of claim 1, wherein the exogenous index odds are displayed
as one or more percentages representing the one or more possible outcomes
in the given event.

4. The device of claim 1, further operable to display the exogenous index
odds to represent probabilities of the one or more possible outcomes,
wherein the sum of the probabilities for all possible outcomes is 100%.

5. The device of claim 1, further operable to receive and display
information from the server system about the new trade, wherein the new
trade comprises the forecast for the value of the exogenous index odds
that will be offered by the exogenous market prior to the one or more
possible outcomes.

6. The device of claim 5, further wherein a settlement value of the new
trade may be determined prior to the outcome of the sporting event.

7. The device of claim 1, wherein the computer device is a smartphone.

8. The device of claim 1, further operable to display the exogenous index
odds for the one or more possible outcomes as one or more percentages and
receive a selection from the user representing a choice of a short or
long position.

9. A method for processing trades on odds-based markets, the method
comprising using a computer device comprising a memory coupled to a
processor and a display unit for: receiving from a server system
exogenous index odds, wherein the exogenous index odds comprise gross
odds for one or more possible outcomes in a given event offered by an
exogenous market, the gross odds having been adjusted so that the sum of
the inverse of the gross odds for all possible outcomes is about 1;
displaying the exogenous index odds on the display unit; obtaining a
selection from a user comprising a forecast of a value for the exogenous
index odds; and communicating the selection to the server system to be
processed by the server system as a new trade.

10. The method of claim 9, further comprising displaying a grid
comprising: the exogenous index odds, at least one short position
selectable by the user, and at least one long position selectable by the
user.

11. The method of claim 10, further comprising displaying the exogenous
index odds as one or more percentages representing the one or more
possible outcomes in the given event.

12. The method of claim 9, further comprising displaying the exogenous
index odds to represent probabilities of the one or more possible
outcomes, wherein the sum of the probabilities for all possible outcomes
is 100%.

13. The method of claim 9, further comprising using the computer device
for receiving and displaying information from the server system about the
new trade, wherein the new trade comprises the forecast for the value of
the exogenous index odds that will be offered by the exogenous market
prior to the one or more possible outcomes.

14. The method of claim 13, further wherein a settlement value of the new
trade may be determined prior to the outcome of the sporting event.

15. The method of claim 9, wherein the computer device is a smartphone.

16. The method of claim 9, further comprising displaying the exogenous
index odds for the one or more possible outcomes as one or more
percentages and receiving a selection from the user representing a choice
of a short or long position.

17. A system for processing options contracts on sporting event odds
markets, the system comprising a processor coupled to a memory containing
instructions operable to cause the system to: define a premium P;
register an options contract between a buyer and a seller, the options
contract comprising a forecast F of a value for odds S of an outcome of a
sporting event that will be offered by an exogenous market prior to the
outcome; determine S from the exogenous market; calculate a buyer payoff
based on F and S with a debit for the premium; and calculate a seller
payoff based on F and S with a credit for the premium.

18. The system of claim 17, wherein: the options contract comprises a
call option, calculating the buyer payoff includes calculating (F/S-1),
and calculating the seller payoff includes calculating (1-F/S).

19. The system of claim 18, wherein the buyer payoff includes
max(F/S-1,0)-P and the seller payoff includes min(1-F/S,0)+P.

20. The system of claim 19, further wherein the system is operable to
adjust a buyer account by an amount of the buyer payoff and adjust a
seller account by an amount of the seller payoff.

21. The system of claim 17, wherein: the options contract comprises a put
option, calculating the buyer payoff includes calculating (1-F/S), and
calculating the seller payoff includes calculating (F/S-1).

22. The system of claim 17, wherein calculating the buyer payoff and
calculating the seller payoff are both completed prior to the outcome of
the sporting event.

23. The system of claim 17, wherein determining S from the exogenous
market comprises determining a median of a latest percentage of volume on
a reference market.

24. The system of claim 17, wherein determining S from the exogenous
market comprises determining a trimmed mean of the latest percentage of
volume on a reference market.

25. The system of claim 17, further comprising a futures trade database
configured to store the registered options contract and settlement data
comprising at least a unique identifier for the buyer and a unique
identifier for the seller.

26. A method for processing options contracts on sporting event odds
markets, the method comprising: defining, using a computer system
comprising a processor coupled to a memory, a premium P; registering in
the memory an options contract between a buyer and a seller, the options
contract comprising a forecast F of a value for odds S of an outcome of a
sporting event that will be offered by an exogenous market prior to the
outcome; determining S from the exogenous market; calculating a buyer
payoff based on F and S with a debit for the premium; and calculating a
seller payoff based on F and S with a credit for the premium.

27. The method of claim 26, wherein: the options contract comprises a
call option, calculating the buyer payoff includes calculating (F/S-1),
and calculating the seller payoff includes calculating (1-F/S).

28. The method of claim 27, wherein the buyer payoff includes
max(F/S-1,0)-P and the seller payoff includes min(1-F/S,0)+P.

29. The method of claim 28, further comprising: adjusting a buyer account
by an amount of the buyer payoff, and adjusting a seller account by an
amount of the seller payoff.

30. The method of claim 26, wherein: the options contract comprises a put
option, calculating the buyer payoff includes calculating (1-F/S), and
calculating the seller payoff includes calculating (F/S-1).

31. The method of claim 26, wherein calculating the buyer payoff and
calculating the seller payoff are both completed prior to the outcome of
the sporting event.

32. The method of claim 26, wherein determining S from the exogenous
market comprises determining a median of a latest percentage of volume on
a reference market.

33. The method of claim 26, wherein determining S from the exogenous
market comprises determining a trimmed mean of the latest percentage of
volume on a reference market.

34. A system for processing derivative products contingent on odds-based
sporting event markets, the system comprising: storage coupled to a
processor, the storage comprising instructions that configure the
processor to: receive a trade party offer from a trade party, the trade
party offer comprising an investment amount at and a forecast
Ft of a value for ST that will be offered, at a time T, by an
exogenous market, wherein ST represents odds that an outcome of a
sporting event will include a certain occurrence and time T is prior to
the outcome of the sporting event; receive an counter-party offer from a
counter-party; match the counter-party offer to the trade party offer;
register the matched counter-party offer and trade party offer as a
derivatives trade; obtain, at time T, the odds ST from the exogenous
market; process, prior to the outcome of the sporting event, a settlement
value of at((Ft/ST)-1) for the derivatives trade; and
credit and debit, prior to the sporting event, the settlement value to
accounts of the trade party and counter-party, respectively.

Description:

CROSS-REFERENCE TO RELATED APPLICATION

[0001] This application is a continuation of U.S. patent application Ser.
No. 12/110,068, filed Apr. 25, 2008, which claims priority to Irish
Patent Application No. S2007/0309, filed Apr. 26, 2007, and also to Irish
Patent Application No. S2007/0498, filed Jul. 10, 2007, the contents of
each of which are hereby incorporated by reference.

FIELD OF THE INVENTION

[0002] The present invention relates to an exchange for derivative
products contingent on odds-based markets and to methods of determining
the settlement price for such derivative products and of settling such
derivative products.

BACKGROUND

[0003] Trading shares involves bringing individuals with disposable
capital together with individuals who need an influx of capital to
develop a business, and offer business shares in return for the
disposable capital. Trading futures, however, brings people together to
transfer the price risk associated with the ownership of some commodity
or a service.

[0004] "Derivatives" is a term used to describe financial products, such
as futures and options contracts, which are derived from other existing
products. For example, equity futures and options are derived from
equities in the underlying share market.

[0005] A futures contract is an agreement between a buyer and a seller to
buy or sell a particular asset some time in the future at a price agreed
today. Futures contracts may be cash-settled or require physical delivery
of the underlying asset. For example, with equity futures, a cash-settled
contract requires a cash amount to be paid on the settlement day,
reflecting the difference between the initial futures price and the price
of the underlying shares when the futures contract reaches maturity. In
doing this, the investor can buy and sell contracts without ever owning
the shares in the first place.

[0006] Options give investors the right, but not the obligation, to buy or
sell a specific product or asset at a fixed price on or before a specific
date. Unlike futures contracts, the potential loss to the buyer of an
option is limited to the initial price (or premium) paid for the
contract, regardless of the performance of the underlying product, e.g.
shares. Like futures, options can be used to try to capitalise on an
upward or downward movement in the market, but also generate returns in a
static market.

[0007] In a similar manner as an insurance contract allows the owner of an
asset to protect it for a premium, futures and options contracts allow
investors to protect their investments. For example, suppose a fund
manager knows they will have a certain amount of money to invest in
shares at a fixed time in the future, but they believe the market is
going to rise and there is a risk they will have to pay a lot more for
the shares. They can purchase options on the same shares for a relatively
small outlay (called a premium), and use the profit from the options to
offset the higher price they would have to pay for the shares when the
money becomes available.

[0008] Online exchanges have recently become popular, wherein individuals
may provide offers and/or take positions, typically on binary outcome
events, such as sporting events or spreads of financial market indices.
Many of the participants in these markets are interested in taking
positions to profit from beliefs of market behaviour, rather than from
the outcome of the events on which these `spot` markets are based. Whilst
such individuals may alternately take long and short positions on odds
markets to achieve this, the conducting of such trades is difficult for
even the most experienced of individuals. Thus, as in other types of
markets, derivatives markets have become more popular than the spot
markets on which they are based.

SUMMARY

[0009] A novel futures product based on odds expectations is defined and
explained hereinafter for simplifying the conducting of trades on odds
markets, and a novel system for trading this product is likewise
disclosed.

[0010] According to an aspect of the present invention, a system for
processing trades contingent on odds-based markets is provided, which
comprises means for receiving odds ST for at least one exogenous
reference market, wherein odds ST correspond to a specified
reference outcome to be decided at a time later than a specified time T;
means for receiving, from trade parties, forecasts Ft and investment
amounts at time t for the settlement of odds ST for the
exogenous reference market at the specified time T, wherein the trade
parties comprise at least one trade party for a positive investment
amount at and at least one trade counter-party for a negative
investment amount at; means for registering at least one trade
(Ft, at) between the trade parties prior to time T, the trade
having a conditional value equal to zero at any time prior to time T; and
means for confirming, in response to the odds ST, the payoff to or
the liability of the at least one trade party as equal to
at(Ft/ST-1), and respectively, the liability of or the
payoff to the at least one trade counter-party as equal to
-at(Ft/ST-1).

[0011] In a preferred embodiment, the system comprises means for settling
the trade value, further to the confirmation of the respective payoff and
liability. The system desirably defines an exchange for the trades.

[0012] In a first embodiment, the system comprises at least one data
processing terminal, wherein the means for receiving odds forecasts and
investment amounts, the means for registering at least one trade and the
means for confirming the respective payoff and liability respectively
comprise data processing terminal components suitably configured by data
processing terminal instructions.

[0013] In a second embodiment, the system comprises a plurality of data
processing terminals connected to a network and in communication with one
another, wherein a first data processing terminal of the said plurality
receives odds forecasts from at least a second data processing terminal
of the said plurality, the first data processing terminal receives
investment amounts from at least a third data processing terminal of the
said plurality, the first data processing terminal registers at least one
trade between the at least second data processing terminal and the at
least third data processing terminal of the said plurality, and the first
data processing terminal confirms the respective payoff and liability.

[0014] According to another aspect of the present invention, a method of
settling trades contingent on odds-based markets is provided, which
comprises the steps of receiving odds ST for at least one exogenous
reference market, wherein odds ST correspond to a specified
reference outcome to be decided at a time later than a specified time T;
receiving, from trade parties, forecasts Ft and investment amounts
at at time t, for the settlement of odds ST for the exogenous
reference market as of the specified time T, wherein the trade parties
comprise at least one trade party for a positive investment amount
at and at least one trade counter-party for a negative investment
amounts at; registering at least one trade (Ft, at)
between the trade parties prior to time T, the trade having a conditional
value equal to zero at any time prior to time T; confirming, in response
to the expiry odds ST, the payoff to or the liability of the at
least one trade party as equal to at(Ft/ST-1), and
respectively the liability of or the payoff to the at least one trade
counter-party as equal to -at(Ft/ST-1); and settling the
trade value.

[0015] According to a further aspect of the present invention, a method of
determining the settlement value ST for trades contingent on
odds-based markets is provided, which comprises the steps of receiving a
complete set of pairs (Vt, St) representing executed trades in
at least one exogenous reference market, wherein odds St and volume
Vt correspond to a specified reference outcome to be decided at a
time later than a specified time T; and determining the settlement value
ST for trades (Ft, at) comprising the median of the latest
percentage of volume by the volume Vt on the reference market prior
to T, such that such that at least 50% of the latest percentage of traded
volume is greater than or equal to ST, and at least 50% of the
latest percentage of traded volume is less than or equal to ST.

[0016] In a first embodiment, the latest percentage of volume by traded
amounts is comprised between 0.1% and 25%.

[0017] In a preferred embodiment, the latest percentage of volume by
traded amounts is comprised between 9% and 11%.

[0018] According to yet another aspect of the present invention, a method
of determining the settlement price ST for trades contingent on
odds-based markets is provided, which comprises the steps of receiving a
complete set of pairs (Vt, Sr) representing executed trades in
at least one exogenous reference market, wherein odds St and volume
Vt correspond to a specified reference outcome to be decided at a
time later than a specified time T; and determining the settlement value
ST for trades (Ft, at) comprising a trimmed mean of the
latest percentage of volume by the volume Vt on the reference market
prior to T.

[0019] In a preferred embodiment, the trimmed mean is an average with a
variable percentage, wherein extreme values on both positive and negative
sides have been removed.

BRIEF DESCRIPTION OF THE DRAWINGS

[0020] An exemplary embodiment of the present invention is described
herein with reference to the drawings, in which:

[0021] FIG. 1 illustrates a system in which a preferred embodiment of the
present invention may be embodied, including a plurality of networked
data processing terminals;

[0022]FIG. 2 further details the hardware components of a first data
processing terminal shown in the system of FIG. 1, including processing
means and memory means;

[0023]FIG. 3 details the processing steps according to which the first
data processing terminal of FIGS. 1 and 2 operates according to a first
embodiment the present invention;

[0024] FIG. 4 details the processing steps according to which the first
data processing terminal of FIGS. 1 and 2 operates according to a second
embodiment the present invention;

[0025] FIG. 5 illustrates the contents of the memory means shown in FIG. 2
at runtime, including several data structures.

[0026] FIG. 6 provides a representation of a first embodiment of a
graphical user interface displayed at any of the plurality of networked
data processing terminals; and

[0027]FIG. 7 provides a representation of a second embodiment of a
graphical user interface displayed at any of the plurality of networked
data processing terminals.

DETAILED DESCRIPTION

[0028] The invention is generally described herein by way of example, with
reference to a preferred embodiment, and several alternative embodiments.
It should be understood, however, that the invention can extend to apply
in other arrangements as well.

[0029] A preferred embodiment of the present invention is shown as a
system in FIG. 1, which depicts a networked computerized trading system
including a plurality of data processing terminals. Amongst the plurality
of data processing terminals, a first data processing terminal 101 is
configured according to the present invention, and is connected with
further data processing terminals over a variety of wired and wireless
networks.

[0030] In the example, terminal 101 is connected via a network with a
second data processing terminal 102, which maintains at least one
odds-based exogenous reference market. In the example, second terminal
102 is a networked betting exchange server, for instance such as the
Betfair exchange administered by The Sporting Exchange company of London,
United Kingdom, although it will be readily apparent to those skilled in
the art that the second terminal may maintain any other type of exogenous
reference market based upon binary outcomes, or that terminal 101 may
itself maintain the at least one odds-based exogenous reference market
and obtain a data feed from terminal 102 for this purpose, for instance
as described in further details hereinafter. In the embodiment shown,
terminal 101 is connected to a Wide Area Network (WAN) 103, of which the
Internet is an example, via an Internet Service Provider (ISP) 104, and
terminal 102 is likewise connected to the WAN 103 via another ISP or the
same ISP 104.

[0031] Terminal 101 is also connected via a network with at least a third
data processing terminal 105, at which a user generates at least one
forecast and provides an indication of an investment amount corresponding
to the forecast, from which terminal 101 generates a futures product
according to the present invention. In the example, third terminal 105 is
a networked personal computing device such as a desktop or laptop
computer, and it will be readily apparent to those skilled in the art
that the third terminal may be any type of personal data processing
device capable of interfacing a network, receiving user input and
forwarding same over the network. In the embodiment shown, terminal 105
is connected to the Wide Area Network (WAN) 103 via another ISP or the
same ISP 104 as terminals 101 and 102.

[0032] Terminal 101 is also connected via a network with at least a fourth
data processing terminal 106, at which a user at least provides an
indication of purchase of the futures product generated by the terminal
101, based on the forecast and investment amount received from the third
terminal 105. In the example, fourth terminal 106 is a networked mobile
computing device such as a mobile telephone or a personal digital
assistant, and again it will be readily apparent to those skilled in the
art that the fourth terminal may be any type of personal data processing
device capable of interfacing a network, receiving user input and
forwarding same over the network. In the embodiment shown, terminal 106
is connected to the Wide Area Network (WAN) 103 via a low-bandwidth
network connection Global System for Mobile Communication (`GSM`)
wireless network, or a higher-bandwidth General Packet Radio Service
(`GPRS`) wireless network, or a yet higher-bandwidth `G3` wireless
network 107. Fourth terminal 106 receives data from terminal 101 and
transmits data back to terminal 101 as a digital signal over wireless
network 107, wherein said signal is relayed respectively to or from the
terminals 101, 106 by the geographically-closest communication link relay
108 of a plurality thereof, at least one of which is connected with a
remote gateway 109 providing an interface with the WAN 103. Gateway 109
is for instance a communication network switch and provides protocol
conversion if required, for instance because terminal 106 transmits data
to terminal 101 which is formatted according to a cellular transmission
protocol and, inversely, terminal 101 transmits data to terminal 106
which is formatted according to a WAN transmission protocol.

[0033] Thus, the potential exists for data exchange between any of
terminals 101, 102, 105 and 106 by way of the WAN 103 and/or wireless
network 107, interfaced by ISPs 104 and/or gateway 109. It will, however,
be readily apparent to those skilled in the art that the above
environment is provided by way of example only, and that the present
invention may be embodied in any network comprising devices connected
thereto exchanging data encoded as described herein.

[0034] An example of terminal 101 shown in FIG. 1 is provided in FIG. 2.
Terminal 101 is a computer terminal configured with a data processing
unit 201, data outputting means such as video display unit (VDU) 202,
data inputting means such as a keyboard 203 and a pointing device (mouse)
204 and data inputting/outputting means such as WAN connection 205,
magnetic data-carrying medium reader/writer 206A and optical
data-carrying medium reader/writer 207A. Reader/writer 206A preferably
reads data and instructions for the processor described herein from
magnetic media such as a floppy disk 206B and writes data processed by
said processor thereto, and reader/writer 207A preferably reads data and
instructions for said processor from optical media such as DVD-R 207B and
writes data processed by said processor thereto.

[0035] Within data processing unit 201, a central processing unit (CPU)
208, such as a Core 2 Duo processor manufactured by the Intel®.
Corporation, provides task co-ordination and data processing
functionality. Instructions and data for the CPU 208 are stored in main
memory 209 and a hard disk storage unit 210 facilitates non-volatile
storage of data and sets of instructions for CPU 208. A modem 211
provides a first means for a wired connection to the ISP 104, for
instance if the connection 205 is effected by a low-bandwidth dial-up
service provider. A network interface card (NIC) 212 provides a second
means for a wired connection to the ISP 104, for instance if the
connection 205 is effected by a high-bandwidth cable modem (not shown). A
universal serial bus (USB) input/output interface 213 facilitates
connection to the keyboard and pointing device 203, 204 and may provide
third means for a wired connection to the ISP 104, for instance if the
connection 205 is effected by a high-bandwidth digital subscriber line
(DSL) modem (not shown). All of the above devices are connected to a data
input/output bus 214, to which said magnetic data-carrying medium
reader/writer 206 and optical data-carrying medium reader/writer 207 are
also connected. A video graphics adapter 215 receives CPU instructions
over said bus 214 for outputting processed data to VDU 202.

[0036] In the preferred embodiment, data processing unit 201 is of the
type generally known as a compatible Personal Computer (`PC`), but may
equally be any device configured with data inputting, processing and
outputting means providing at least the functionality described above.

[0037] Processing steps are described in FIG. 3, according to which
terminal 101 operates a preferred embodiment of the present invention.
Terminal 101 is first switched on at step 301. At step 302, a set of
instructions is loaded which provides said terminal 101 with basic
functionality, such as initialisation of data input and/or output
devices, data file browsing, keyboard and/or mouse input data processing,
video data outputting, network connectivity and network data processing.
At step 303, an application is loaded into memory 209, which is a set of
instructions for configuring CPU 208 to process data according to rules
described hereafter. A data structure is also loaded at step 303, which
stores futures trades as detailed hereinafter and a user account for any
user who connects to terminal 101 for any of creating, buying and selling
futures trades. Upon completing the above initialisation and loading of
steps 301 to 303, terminal 101 is configured to receive and process
network input data and to process and transmit network output data,
whereby terminal 101 establishes the connection 205 to the system show in
FIG. 1 at step 304.

[0038] In a preferred embodiment of the present invention, the exogenous
reference market for a given event is produced as exogenous index odds
for the given event at terminal 101 at step 305, by receiving a data feed
over the WAN 103 from server 102 of all the odds being offered as liquid
open interest for the various possible outcomes in that event, and by
adjusting the best odds on offer for each outcome to define new exogenous
index odds, so that the sum of the inverse (gross) exogenous index odds
for all possible outcomes in the event is as close as possible to 1
(100%). The adjustment to a 100% market may be carried out in the
following manner.

[0039] Let W1, W2, . . . Wm be the best price gross odds freely
available for the various possibilities 1, 2, . . . m at a given point in
time, wherein it shall be assumed that the sum of 1/Wi amounts to a
number greater than 1, with no adjustment required if the sum is less
than or equal to 1.

[0040] Let bi be computed so that H(bi)=1/Wi, wherein H is
defined as the following approximation to the cumulative standard normal
distribution:

H(x)=1/(1+exp(-1.6*x-0.07*x 3))

[0041] Next, let d be computed so that the sum of H(bi-d) for a given
event is 1. Then, for i=1, 2, . . . m, the exogenous index odds prices
are given by:

Yi=1/H(bi-d)

[0042] These exogenous index odds will be made available for public
display, and the ultimate settlement prices for any futures markets based
on the exogenous index odds shall be the levels of exogenous index prices
as of the close of the futures market for that event. In an alternative
embodiment, exogenous market data is received from exchange server 102 at
step 305.

[0043] In the example, ST denote an S-for-1 odds position for an
outcome on an existing `spot` market, such as the exogenous market
maintained at terminal 101 or server 102, wherein the position yields a
gross payout of S units if the outcomes occurs and 0 units otherwise. S
varies over a predetermined time bounded by an expiry T, for instance
bounded by market close if the exogenous market is subject to specific
activity periods. The Expiry T is selected as a point in time which is
expected to be of interest to potential market participants. There may be
markets with several sets of Expiries for the same event, such as some
arbitrary time period before a scheduled event time, or an actual
scheduled event time, or some arbitrary time period and/or length of the
event. In the case of a horse race for example, such a set of expiry
would comprise 10 minutes before a scheduled race time, the scheduled
race time and after 400 meters of racing. Just as in traditional
financial markets, there may be calendar index futures such as a set
date.

[0044] At step 306, a first question is asked as to whether new forecast
data Ft has been received from at least a third terminal, such as
terminal 105, in respect of odds defined in the exogenous market data
received at step 305. Ft denote a `futures` trade price (i.e.
forecast) for the `settlement` value of ST on the market at expiry
T. If the question is answered positively, then terminal 101 creates a
new futures trade in the data structure at step 307, which is for
instance a database of futures trades, and registers the trade price at
for the furthers trade in the database. A futures trade (i.e. contract)
bought at time t on the basis of Ft for an investment of at
when the market settles at value ST will result in either a payout
of at(Ft/ST-1) if ST is less than Ft, or a
liability of -at(1-Ft/ST) if ST is more than Ft,
with no disbursements occurring if ST and Ft are substantially
equivalent. The futures trade may be thought of as a delivery of an odds
position on the market at an agreed price at the time of settlement,
bundled together with an offsetting odds position on the market at the
price of settlement, leading to a neutral position with regard to the
actual event outcome.

[0045] Specifically, a position of (1-unit) on the event at odds F0
on the actual exogenous market will result in a payout of either Ft
(if the outcome occurs) or 0. In order to offset this position with a
position at odds ST, a stake of Ft/ST would need to be
sold on the exogenous market. Thus, the net change in position would be
Ft/ST-1, and the net position on the exogenous market would be
null: the position would be entirely neutral with respect to the
occurrence or non-occurrence of the outcome. According to the example
above, the maximum liability of one unit long in the futures trade is -1,
and the maximum gain is Ft-1. At step 308, terminal 101 updates the
exchange data which is sent to connected remote user terminals, such as
terminal 106, in the form of replies to database queries or periodically,
and which comprises any one, a selection, or all of the futures trades
(Ft, at) stored in the database.

[0046] A second question is asked at step 309, as to whether an offer has
been received for a futures trade (Ft, at) stored in the
database. An offer is received from an individual submitting, via a
network-connected terminal configured with a suitable interface, such as
terminal 105 or 106, on the exchange maintained at terminal 101 whereat
the individual has deposited funds, futures price bids both long and
short in respect of a futures trade (Ft, at) and get matched
with other individuals' bids on a first-come first-served basis when
`bid` and `offer` prices agree. Thus, if the question is answered
positively, then the offer is temporarily stored at step 310 and a first
attempt is made to match the offer with the product. If the first attempt
at matching is unsuccessful, the offer remains temporarily stored and
subsequent matching attempts are performed during each iteration of the
process delimited by step 305 to 313, until the Expiry, at which time
offers cannot be matched anymore. Unmatched offers at expiry are removed
from storage. Alternatively, the offer is matched and, at the next update
of the exchange data at the next iteration of step 308, is removed from
temporary storage and included in the exchange data.

[0047] Alternatively, the question of step 309 is answered negatively and
a third question is asked at step 311, as to whether an expiry T has been
reached in respect of anyone futures trade (Ft, at) stored in
the database. If the question is answered positively, then the settlement
value of the futures trade is processed at step 312, in accordance with
the parameters described hereinabove. In an advantageous alternative
embodiment of the present invention, the application incorporates
movement limits, whereby a percentage α (representing an extreme
percentage move) may be set, so that for any given trade at price
Ft, the price at which the trade is settled is limited to lie
between at(Ft/(1+α)) and at(Ft/(1-α)), so
that the change in the position is between
Ft/(Ft/(1-α))-1=-α and
Ft/(Ft/(1+α))-1=α, wherein α is a value
typically less than or equal to 50%. As a result of processing the
settlement value, the respective user accounts of the users who have
bought the futures trade (Ft, at) at expiry are credited or
debited in accordance with whether the settlement value respectively
represents a payoff or a liability.

[0048] Alternatively, the question of step 311 is answered negatively, and
a fourth question is asked at step 313, as to whether the user of
terminal 101 may then decide to terminate the processing of the
application first loaded at step 303. If the question is answered
negatively, control returns to step 305 for the purpose of receiving
updated exogenous market data, and thereafter process further futures
trades. The uninterrupted combined cycle of steps 305 to 312 in effect
results in a futures exchange for odds-based exogenous markets. However,
if the question is answered positively, then the instructions and the
database first loaded at step 303 are unloaded from memory 209 at step
314, and the terminal may eventually be switched off at step 315.

[0049] Processing steps are described in FIG. 4, according to which
terminal 101 operates an alternative embodiment of the present invention.
Terminal 101 is again first switched on at step 301. At step 302, the set
of instructions is loaded which provides said terminal 101 with basic
functionality, such as initialisation of data input and/or output
devices, data file browsing, keyboard and/or mouse input data processing,
video data outputting, network connectivity and network data processing.
At step 303, an application is loaded into memory 209, which is a set of
instructions for configuring CPU 208 to process data according to rules
described hereafter. A data structure, such as a database, is also loaded
at step 303, which stores futures trades as detailed hereinafter and a
user account for any user who connects to terminal 101 for any of
creating, buying and selling futures trades. Upon completing the above
initialisation and loading of steps 301 to 303, terminal 101 is optimally
configured to receive and process network input data and to process and
transmit network output data, whereby terminal 101 establishes the
connection 205 to the system show in FIG. 1 at step 304.

[0050] At step 305, exogenous market data such as odds ST and
corresponding period expiry data T is again received by terminal 101. At
step 306, a first question is asked as to whether new forecast data
Ft has been received from at least a third terminal, such as
terminal 105, in respect of odds defined in the exogenous market data
received at step 305. If the question is answered positively, then
terminal 101 creates a new futures trade in the database of futures
trades at step 307, and registers the trade price at for the
furthers trade in the database. At step 308, terminal 101 updates the
exchange data which is sent to connected remote user terminals, such as
terminal 106, in the form of replies to database queries or periodically,
and which comprises any one, a selection, or all of the futures trades
(Ft, at) stored in the database.

[0051] In any futures market, precautions must be taken to avoid
manipulation of futures settlements via manipulation of the index or
exogenous market on which the futures trades are based. The most common
method of achieving this is to define a robust Exchange Delivery
Settlement Price (EDSP), which is typically a trimmed average of index
prices towards the expiry of the trades. It is important that this
formula be relatively simple, publicly available, and impervious to
manipulation. While there are several common classes of formulae which
might be used to achieve this, analysis of market data and simulated
stress tests have suggested the median of the last quarter by volume of
turnover before expiry. In the preferred embodiment, the median is the
value ST such that:

i : S i ≧ S T V i ≧ 1
2 All i V i ##EQU00001## and ##EQU00001.2##
i : S i ≦ S T V i ≧ 1 2
All i V i ##EQU00001.3##

[0052] i.e. at least 50% of volume is at least as high as (i.e. greater
than or equal to) ST, and at least 50% of volume is at least as low
as (i.e. less than or equal to) ST. In an alternative embodiment,
the median is replaced by a trimmed mean, i.e. an average with a certain
percentage of extreme values on both positive and negative sides removed.

[0053] In this embodiment, the settlement value ST of a trade is
processed as follows. A question is asked at step 401, as to whether a
predetermined reference period of trading has started for the computation
of a volume-weighted median of trades (Si, Vi), wherein indicia
i=1, 2, . . . , n and the contracts consist of amounts Vi at odds
Si occurring in the final reference period of trading. If the
question of step 401 is answered negatively, control proceeds to the
question of step 313, described above and again further below for
reference. Alternatively, the question of step 401 is answered
positively, and conditions are declared for the computation at step 402:
it is preferable that the odds Si be ordered, such that
S1<S2< . . . <Sn. and Vtotal denotes the
total volume of trades during the reference period:
Vtotal=V1=V2+ . . . +Vn. At step 403, Vtotal is
processed as the total of the trades performed since the beginning of the
reference period. For example, only one trade has been processed since
the beginning of the period, then Vtotal=V1. Likewise, if two
trades have been processed since the beginning of the period, then V and
so on and Vtotal=Vi+V2, so forth.

[0054] A question is next asked at step 404, as to whether the processed
value of Vtotal as of the past iteration of step 403 is less than
half of Vtotal. If the question of step 404 is answered positively,
a next question is asked at step 405, as to whether the predetermined
reference period of trading has ended. If the question of step 405 is
answered negatively, control proceeds to the question of step 313,
described above and again further below for reference. Alternatively, if
either the question of step 404 is answered negatively (signifying that
the processed value of Vtotal as of the past iteration of step 403
is more than half of Vtotal), or the question of step 405 is
answered positively (signifying that the predetermined reference period
of trading has ended), then a next question is asked at step 406, as to
whether the processed value of Vtotal as of the past iteration of
step 403 is equal to half of Vtotal.

[0055] If the question of step 406 is answered positively, then the
settlement value of the trade ST is defined as Sk at step 407
and control then proceeds to the question of step 313. Alternatively, the
processed value of Vtotal as of the past iteration of step 403 must
amount to more than half of Vtotal, and in this case the settlement
value of the trade ST is defined as [(Sk-1+Sk)/2] at step
408, and control then proceeds to the question of step 313.

[0056] The application loaded at step 303 in effect determines the
settlement value ST for trades (Ft, at) by calculating the
median of the latest percentage of volume by traded amounts Vt on
the reference market prior to T, such that at least 50% of the latest
percentage of volume is greater than or equal to ST, and at least
50% of the latest percentage of volume is less than or equal to ST:
the application bounds the settlement value of the futures trade at
expiry at step 402 such that at least 50% of the latest percentage of
volume is greater than or equal to ST, and the application bounds
the settlement value of the futures trade at expiry at step 403 such that
at least 50% of the latest percentage of volume is lesser than or equal
to ST. As a result of processing the settlement value ST, the
respective user accounts of the users who have bought the futures trade
(Ft, at) at expiry are credited or debited in accordance with
whether the settlement value respectively represents a payoff or a
liability.

[0057] The question is asked at step 313, as to whether the user of
terminal 101 may then decide to terminate the processing of the
application first loaded at step 303. If the question is answered
negatively, control returns to step 305 for the purpose of receiving
updated exogenous market data, and thereafter process further futures
trades. The uninterrupted combined cycle of steps 305 to 312,
incorporating value settlement calculation of steps 401 to 408, in effect
results in a tamper-proof futures exchange for odds-based exogenous
markets. However, if the question is answered positively, then the
instructions and the database first loaded at step 303 are unloaded from
memory 209 at step 314, and the terminal may eventually be switched off
at step 315.

[0058] Some exogenous markets are known to be subjected to external events
beyond the control of the market administering system. For example, in a
betting market for equestrian races, individual horses are frequently
retired from a race moments before the start of the race due to
unforeseen circumstances. Such external influences require corresponding
adjustments of the prices on the exogenous market, and in an alternative
embodiment of the present invention, the futures market may either
suspend trading and nullify all trades, or adjust all settlement prices
in a manner reflecting the adjustment in the exogenous market, as a
contingency. For example, if an external event occurs and the exogenous
market is corrected by fixed percentage decrease of 25% of all (gross)
odds, then a futures trade entered into in respect of odds afflicted by
the correction will be similarly reduced by 25%, in `parallel` with the
exogenous market.

[0059] The contents of the memory 209 of terminal 101 at any given time
during the processing of data with the application according to the
invention, such as shown in FIGS. 3 and 4 by way of example, are further
detailed in FIG. 5.

[0060] An operating system is first shown at 501, which corresponds to the
set of instructions loaded at step 302 for providing terminal 101 with
basic functionality, such as initialisation of data input and/or output
devices, data file browsing, keyboard and/or mouse input data processing,
video data outputting, network connectivity and network data processing.
An application is shown next at 502, which corresponds to the set of
instructions loaded at step for configuring CPU 208 to process data as
detailed above.

[0061] A database is shown next at 504, which corresponds to the data
structure also loaded at step 303 for storing futures trades as detailed
above. The database preferably stores futures trade data 504 comprising
at least the respective data defining each trade (Ft, at). The
database also preferably stores settlement data 505 comprising at least a
respective unique identifier for each party to any trade 504, the said
each parties comprising at least one trade party, in the example the user
of terminal 106, and one trade counter-party, in the example the user of
terminal 105. The database preferably further stores unique user account
or registration data 506, or unique terminal account or registration data
506, for at least uniquely identifying each trade party or counterparty
in the system and validating access to the said system.

[0062] Query replies are shown at 507, which are data packets processed by
application 502 for communication to any connected terminal in the system
to which it is connected, such as market data supplying terminal 102,
forecasting and trade offering terminal 105 and trade contracting
terminal 106, as a reply to a respective query from the said any
terminal. Typically, such query replies comprises trade data (Ft,
at) 504, and/or settlement data 505, and/or trade parties data 506.

[0063] Exogenous market data is shown at 508 as data received from
terminal 102 before its inclusion in data structure 503 under the form of
in trades 504. Exogenous market data 508 may be stored at terminal 101
for data correlation and/or verification purposes independently of the
trades 504 since, in the system of FIG. 1, the user at any third-party
terminal 105, 106 may access exogenous market data 508 independently of
terminal 101 and directly from terminal 102. Forecast data Ft and
investment amount indication data at received from the at least third
data processing terminal 105 are respectively shown at 509 and 510, from
which the application 502 generates and stores the trades data 504.
Purchase decision data 511 received from the at least fourth data
processing terminal 106 is shown at 511, the simplest embodiment of which
is a relevant portion of the unique terminal account or registration data
506 of the user of terminal 106, or of terminal 106. Memory portion 512
stores the offers received at step 309 and temporarily stored at step
310, before their matching and until the expiry of the market event to
which they respectively relate.

[0064] This system is ideally suited to an online exchange, whereby
individuals submit, via a suitable interface, on an exchange where they
have deposited funds, futures price bids both long and short and get
matched with other individuals' bids on a first-come first-served basis
when `bid` and `offer` prices agree. Prices on a futures market may be
interpreted as market expectations of final odds on a spot market, in a
manner which is intuitively clear to experienced and relatively
inexperienced market participants alike. Each time an individual enters
into a position, a `hold` is placed on a portion of their funds to the
extent of their maximum liability, as determined by their position. In
the alternative embodiment illustrated in FIG. 4, the extent of their
maximum liability is as determined by their position and by the limit on
price movements.

[0065] In an alternative embodiment, movement limits may be imposed on the
Settlement Price, in accordance with practice on many traditional Futures
Exchanges internationally. This option permits leveraged positions, as
the maximum loss for a given contract may be significantly reduced. This
embodiment may be carried out by the following modification of the
settlement formula. For a futures price F and a final settlement price S,
for a 1 unit contract, the following pre-commission settlement amounts
apply:

[0066] to the Buyer (without limits): (F/S-1)

[0067] to the
Seller (without limits): (1-F/S)

[0068] and the corresponding amounts would be:

[0069] to the Buyer (with
limits): max(min(F/S-1,K-1),1/K-1)

[0070] to the Seller (with limits):
min(max(1-F/S,-K+1),-1/K+1)

[0071] Note that the function min(x,y) equals the lesser of x and y, and
the function max(x,y) equals the greater of x and y. Typical values of K
would be 1.50, 2.0, 3.0 and so on and so forth. By way of example, for
F=20, S=10 and K=1.5,

[0076] However, for F=20 and K=1.5 still, the limits would have no effect
if S is greater than 13.33. The maximum potential loss per unit of
contract for the seller is reduced from F-1 to K-1. Thus a seller for
F=20 when K=1.5 would have exposure reduced from 19 per unit of contract
to 0.5 per unit of value of the contract.

[0077] On the other hand, by way of another example, suppose F=2.0, S=50
and K=1.5,

[0082] The maximum possible loss for the buyer is reduced from 1 unit to
1-1/K units. Thus a buyer for F=2.0 when K=1.5 would have exposure
reduced from 1 unit to 0.33 units per unit of value of the contract.

[0083] In yet another alternative embodiment, options markets of call and
put type may be mirrored. In this embodiment, the Exchange may be set up
in a manner comparable to the earlier embodiments, but the settlement
formulae are modified: a quantity P (the "premium") is defined for the
exchange, and for a Buy-Sell agreed price F the payoff structure for
settlement price S is given by the following modification of the
settlement formula.

[0084] For a `Call`-Type Exchange:

[0085] Buyer receives: max(F/S-1,0)-P

[0086] Seller Receives: min(1-F/S,0)+P

[0087] For a `Put`-Type Exchange:

[0088] Buyer receives: max(1-F/S,0)-P

[0089] Seller Receives: min(F/S-1,0)+P

[0090] By way of example, suppose a `Call`-type market with P=0.10,
suppose the buyer and the seller agree on a contract price of F=10.0 and
the resulting settlement price is S=8.0. In this embodiment, the payoffs
are therefore as follows,

[0091] to the Buyer: max(10/8-1,0)-0.1=0.15

[0092] to the Seller: min(1-10/8,0)+0.1=-0.15

[0093] Had S been 11 instead of 8, then the payoffs above would have been
instead,

[0094] to the Buyer: max(10/11-1,0)-0.1=-0.1

[0095] to the Seller: min(1-10/11,0)+0.1=0.1

[0096] In the above alternative embodiments, the operation of the Exchange
is identical to that outlined in relation to the basic Futures Exchange
according to the present invention.

[0097] A preferred embodiment of the interface discussed above is
illustrated in FIG. 6, for instance on the display of terminal 105 or
106. The interface 601 is shown displayed on VDU 202 and preferably
comprises a number of user-operable sections, each having a respective
functionality. The user operability may be implemented in a conventional
manner, using either or both of keyboard 203 and mouse 204 for
alphanumerical data input and for displacing an interface cursor 602 over
a section and effecting a selection. Such a configuration is referred to
as a `point and click` interface, and is particularly useful for use with
personal computers. It will be readily understood by those skilled in the
art, however, that the characteristics and functionality, shortly to be
described, of such an interface may be adapted for optimal use to the
respective data input and display capacities of a vast number of very
disparate data processing terminals, such as the example mobile telephone
handset 106.

[0098] A first section 603 is a shortcut button to the user or terminal
data 506 and any of the financial data 504, 505 respectively associated
with that user or terminal data 506 stored in the database 503 of
terminal 101. Button 603, when selected by translating pointer 602 over
the section and providing a selection input, such as a mouse click or a
keyboard stroke, results in a user- or terminal-specific data query being
sent to terminal 101 over the network, and which will be replied to by
terminal 101 with one or more query replies 507, specifically addressed
to the requesting terminal using unique identification data 506. Button
603 may be used for a user to manage any number of preferences and/or
configuration parameters defining his trading account as maintained by
terminal 101.

[0099] A next section 604 is a shortcut button to the trading data 504
respectively associated with the user 506 logged at the terminal, or
associated with the terminal 506. Again, button 604, when selected by
translating pointer 602 over the section and providing a selection input,
such as a mouse click or a keyboard stroke, results in a user- or
terminal-specific data query being sent to terminal 101 over the network,
and which will be replied to by terminal 101 with one or more query
replies 507, specifically addressed to the requesting terminal using
unique identification data 506. Button 604 may be used for a user to
manage all of the trades 504 to which the user is a party or a
counterparty.

[0100] A next section 605 provides a representation of the futures market
and is preferably embodied as a user-configurable grid. The
representation 605 of the market is preferably updated in real-time, with
event data 606 obtained from exogenous market data 508 displayed in
respect of each corresponding trade 607 (504, 509) offered for matching
608, 609 (510) by a trade counter-party 506. The corresponding matching
data 608, 609 is preferably, although not necessarily, configured for
allowing users to take (511) a short 608 or a long 609 position
corresponding to the investment data 510. The representation 605 of the
market is also preferably updated in real-time, with event expiry data
610 likewise obtained from exogenous market data 508 displayed in respect
of each corresponding trade 607 (504, 509), and a preferred embodiment of
the representation of expiry data may take the form of a running
countdown to the expiry of the trading time allowed for the respective
event 607.

[0101] The user-configurable functionality of the interface 601,
particularly of representation 605 therein, may be implemented by
permitting a user to index trades 607 (504, 509) on offer by type of
exogenous market data 508 (e.g. event data 606), to selectively display
only short position matching data 608 or long position matching data 609,
to order trades 607 (504, 509) chronologically based on event expiry data
610 and it will be readily understood by those skilled in the art that
any number of further configurations, particularly advantageous forms of
which may allow for any single, combination, or all of the above, may be
implemented, without departing from the scope of the present invention.

[0102] A next section 611 is a shortcut button to communicate a selection
of matching data 608, 609 by the user or terminal 506 to terminal 101.
Further to the selection of a trade 607 and/or of matching data 608 or
609 with cursor 602 by translating pointer 602 over representation 605
and providing a selection input, such as a mouse click or a keyboard
stroke, the selection of button 611 results in the communication of the
selection of the trade 607 and/or matching data 608 or 609 to terminal
101, at which it will be received as trading input data 511 for updating
the database 503. The communication is uniquely associated with the
communicating trade party or counterparty using unique identification
data 506 associated with the terminal.

[0103] In the preferred embodiment, if a user 506 selects button 604, the
representation 605 changes upon receipt of the data query reply 507 at
the terminal, from the live market data to the trades 504 uniquely
associated with the requesting user 506. The representation may be
substantially the same as the example shown and described above, to the
exception that trades 607 displayed now only comprise those to which the
user is a party or counterparty. A next section 612 is a shortcut button
to communicate a divestment of a trade 607 by the user or terminal 506 to
terminal 101. Further to the selection of a trade 607 and/or of matching
data 608 or 609 to which the user is a party or counterparty, with cursor
602 by translating pointer 602 over representation 605 and providing a
selection input, such as a mouse click or a keyboard stroke, the
selection of button 612 results in the communication of an offer to sell
the trade 607 to terminal 101, at which it will be again received as
trading input data 511 for updating the database 503, but with a negative
investment amount 608, 609 to be offset by an eventual buyer.

[0104] A next section 613 is a shortcut button to submit a new proposal
for a trade 607 to terminal 101. Button 613, when selected by translating
pointer 602 over the section and providing a selection input, such as a
mouse click or a keyboard stroke, results in the communication of a
selection of event data 508 and respective forecast data 509 and
investment data 510 to terminal 101, at which it will be received and
eventually processed as a new trade 504 uniquely associated with the
communicating trade party or counterparty, using unique identification
data 506 associated with the terminal or user from which the proposal was
received. Adverting to the description above, the new trade data 504
appears as a trade 607 including event particulars 606, 610 and matching
data 608, 609 in the live futures market representation 605 once the
application 502 updates the database 503 with the proposal data.

[0105] An alternative embodiment of the interface discussed above is
illustrated in FIG. 7, for instance on the display of terminal 105 or
106. The interface 701 is shown displayed on VDU 202 and again comprises
a number of user-operable sections, each having a respective
functionality. The user operability may again be implemented in a
conventional manner, using either or both of keyboard 203 and mouse 204
for alphanumerical data input and for displacing the interface cursor 602
over a section and effecting a selection.

[0106] The sections 603, 604, 612 and 613 are featured in interface 701
with substantially the same respective purpose and functions as
previously described herein.

[0107] A next section 702 provides a representation of a futures market
containing a plurality of events and is preferably again embodied as a
user-configurable grid. The representation 702 of the market is
preferably updated in real-time, with event data 703 obtained from
exogenous market data 508 displayed in respect of each corresponding
trade 704 (504, 509) offered for matching 705, 706 (510) by a trade
counter-party 506. The corresponding matching data 705, 706 is
preferably, although not necessarily, configured for allowing users to
take (511) a short 705 or a long 706 position corresponding to the
investment data 510. The representation 702 of the market is also
preferably updated in real-time, with event expiry data 610 likewise
obtained from exogenous market data 508 displayed in respect of each
corresponding trade 704 (504, 509), and a preferred embodiment of the
representation of expiry data may take the form of a running countdown to
the expiry of the trading time allowed for the respective event 703. In a
particularly advantageous implementation of this embodiment, the
representation 702 includes tabulations 708 for selecting the respective
user-configurable grid of any particular event of the plurality thereof,
therefore the respective event data 703, trades 704 and matching data
705, 706 for same.

[0108] The user-configurable functionality of the interface 701,
particularly of representation 702 therein, may be implemented by
permitting a user to index trades 704 on offer by type of exogenous
market data 508 (e.g. event data 703), to selectively display only short
position matching data 705 or long position matching data 706, to order
trades 704 (504, 509) chronologically based on event expiry data 610 and
it will be readily understood by those skilled in the art that any number
of further configurations, particularly advantageous forms of which may
allow for any single, combination, or all of the above, may be
implemented, without departing from the scope of the present invention.

[0109] In this embodiment, the respective representation of each matching
data 705, 706 is configured as a shortcut button 707 to communicate a
selection of matching data 705, 706 by the user or terminal 506 to
terminal 101. Further to the selection of a trade 704 and/or of matching
data 705 or 706 with cursor 602 by translating pointer 602 over
representation 702 and providing a selection input, such as a mouse click
or a keyboard stroke, the selection of any button 707 results in the
communication of the selection of the trade 702 and/or matching data 705
or 706 to terminal 101, at which it will be received as trading input
data 511 for updating the database 503. The communication is uniquely
associated with the communicating trade party or counterparty using
unique identification data 506 associated with the terminal.

[0110] Since the system is preferably intended for use with many remote
terminals such as terminals 105 and 106, the interface 601 is preferably
implemented as a file containing at least both instructions encoded in
Hyper-Text Mark-up Language (HTML) and the data from terminal 101
described above and which, when received by each remote terminal in the
environment of FIG. 1, may be processed for display as a user-interactive
Internet page. Many variations may be readily envisaged by those skilled
in the art, making use of any or all of Cascaded Style Sheets (CSS),
extended Mark-up Language (XML), functional applets encoded in Javascript
and the like, without departing from the scope of the present invention.
Preferably still, because of the transactional character of the data
exchanged between terminal 101 and remote terminals 105, 106, the file
and/or the communication path is secured against tampering and/or
unauthorised access or use, with any suitable security and/or encryption
techniques, such as for instance securing each respective connection
between terminals 101 and 105, 106 with secure HTTP (https), requesting
terminal and/or user authentication at terminal 101 from any remote
terminal 105, 106, and the like.

[0111] Exemplary embodiments of the present invention have been described
herein. Those skilled in the art will understand, however, that changes
and modifications may be made to these embodiments without departing from
the true scope and spirit of the invention, which is defined by the
claims.